Intelligent Finance and Standard Life are also cutting their mortgage interest rates
Under HSBC's mortgage 'price promise', launched in July 2000, the bank pledged its Home Buyer variable rate would never be more than 1% over the Bank of England base rate. Homeowners borrowing over £250,000 will also see their interest rate fall by 0.25% to 6%.
Such moves are on the back of developments in HSBC's mortgage department this week. A new mortgage deal allowing borrowers to pay interest only for the first three years of their mortgage has been launched.
This means the initial monthly cost of a typical £75,000 mortgage is likely to reduce by £132.82 to £390.63, offering cheaper monthly repayments during the first three years than discounted deals currently offered by the UK's top 10 lenders.
HomeStart mortgages will automatically convert to capital repayment terms after three years.
Intelligent Finance, the telenet bank, has also cut its interest rate starting from May 1, reducing its six-month initial discounted mortgage rate to 4.75% and its standard variable mortgage rate to 6.25%.
Standard Life announced a cut of 0.25% on the standard variable rate of its Freestyle mortgage from 30 April. The standard rate falls from 6.75% to 6.5% and the discount rate, valid for the first six months of Freestyle falls to 4.74%.
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